Jefferies, a global investment banking and capital markets firm, has highlighted the opportunities for auto-component companies like Motherson Group and Bharat Forge in the rapidly expanding Indian electronics manufacturing sector. The report, titled “Electronics: A New Growth Opportunity for Auto-component Makers,” notes that India’s electronics industry has grown at a CAGR of 15% from 2016-2024, with a target to quadruple to $500 billion by 2031. While India has made significant progress in chip design and electronics assembly, the value addition remains low, at 18-20%, which the government aims to increase to 35% by 2030.
The report highlights Motherson’s recent entry into the electronics manufacturing space, having formed a joint venture with Hong Kong-based BIEL Crystal to manufacture glass for consumer electronics. The company has already operationalized its first facility in the December quarter and plans to launch two more plants in 2026 and 2027. Meanwhile, Bharat Forge has partnered with AMD and Taiwan-based Compal Electronics to manufacture servers in India using its existing SMT facility.
India’s auto industry has been a success story, driven by prudent policies and rising demand. The country is now the fourth-largest auto producer globally, with a significant portion of its production being exported. The backbone of India’s auto manufacturing success lies in its component makers, who have forged technology collaborations with global suppliers, expanded production capacities, and achieved manufacturing excellence in a complex supply chain. These suppliers not only cater to domestic automakers but also export auto components worldwide, with exports reaching $21 billion in 2024.